Charities likely to receive £44m in discretionary business rate relief in 2014/15

The expected amount will be an increase of £1m on the previous year, according to government figures based on local authority forecasts

Charity shops on the high street
Charity shops on the high street

Charities are expected to receive £44m in discretionary relief on business rates out of a potential £355m in 2014/15, latest government figures show.

New statistics from the Department for Communities and Local Government show that charities in England benefited from £43m of a potential £349m of discretionary rate relief in 2013/14. The figures for 2014/15 are based on forecasts supplied by councils.

Premises used for charitable purposes automatically qualify for 80 per cent relief from business rates and can be given relief on the remaining 20 per cent at the discretion of local authorities.

The DCLG data does not make it clear why charities received such a small proportion of the maximum possible amount.

A submission to the government on its consultation on potential changes to the business rates regime in England from four charity sector bodies last month said many charities were concerned about a lack of clarity in discretionary rate relief policies used by local authorities.

"The detail, application and publication of discretionary rate relief policies vary hugely between local authority areas," it said.

It said this lack of consistency caused problems for charities that were trying to claim discretionary relief, and half of charity respondents to a survey said they did not understand their local authority’s eligibility criteria for discretionary rate relief.

"While we appreciate that local authorities should have discretion in awarding business rate relief, this lack of clarity creates a barrier for charities that wish to claim discretionary rate relief and can waste valuable time and resources through applications that are unlikely to succeed," it said.

The four bodies, including the National Council for Voluntary Organisations and the Institute of Fundraising, called in their submission for the 80 per cent mandatory relief for charities to be increased to 100 per cent.

There have been signs that councils are becoming less generous with this discretionary element. Last year, Calderdale Borough Council in West Yorkshire approved plans to end discretionary rate relief for national charities that operate shops in its area in order to make savings of £50,000, while this year Pembrokeshire County Council in Wales consulted on the same move.

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